Economic and Financial Terminology Part 6

Quiz – II

1) Withdrawal slips used in SB accounts are

(a) Negotiable Instruments

(b) Quasi Negotiable Instruments

(c) Non-negotiable instruments 

(d) Special bearer instruments

2) Credit risk is:

(a) default of the banker to maintain CRR

(b) default of the banker to issue credit card

(c) default of the banker to release credit to the borrower on time

(d) default of the customer to repay the loan

3)  “Sub-prime” refers to?

(a) Lending done by banks at rates below PLR

(b) Funds raised by the banks at sub-Libor Rates

(c) Group of banks which are not rates as prime banks as per Banker’s Almanac

(d) Lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards

(e) All of the above

4)  Whenever RBI does Open Market Operation Transaction, actually it wishes to regulate which of the following?

(a) Inflation only

(b) Liquidity in economy

(c) Borrowing powers of the banks

(d) Flow of Foreign Direct Investments

(e) None of these

5)  Which of the following statement is true in respect of Commercial Paper (CP)?

(a) Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note

(b) CP can be issued by Corporate, primary dealers (PDs) and the all-India financial institutions (FIs)

(c) A corporate would be eligible to issue CP provided the tangible net worth of the company, as per the latest audited balance sheet, is not less than Rs. 4 crore;

(d) All of the above are True

6)   Type of arrangement under which a bank pays the seller the value of the bills and later collects it from the buyer on the due date is

(a) Factoring

(b) Forfaiting

(c) Bill discounting

(d) Bill compounding

7) Subprime lending’ is a term applied to the loans made to _______________.

(a) Those borrowers who do not have a good credit history

(b) Those borrowers who have a good credit history

(c) Those borrowers who do not have a good debit history

(d) Those borrowers who have a good debit history

8) In case of non-compliance of the award by the bank the banking ombudsman will report to

(a) RBI                 

(b) supreme court

(c) finance ministry

(d) consumer protection forum

9) In a Demand Draft the word Order is changed to Bearer by the holder of the dd. It is called

(a) Endorsement

(b) Material alteration

(c) Crossing

(d) None of the above

10) On the contents of the locker, the banker has:

(a) right of set-of

(b) particular lien

(c) general lien

(d) None of the above

11) What is the maximum loan amount available under Educational Loan for study in India and abroad?

(a) Rs. 7,50,000/- & Rs. 15,00,000/-

(b) Rs. 5,00,000/- & Rs. 10,00,000/-

(c) Rs. 10,00,000/- & Rs. 20,00,000/-

(d) Rs. 15,00,000/- & Rs. 30,00,000/-

12) Which of the following are non-fund faced facilities?

(a) Financial Planning

(b) Executor & Trustee

(c) Locker

(d) All the above

13) IFSC stands for

(a) Indian Foreign Service class

(b) Indian Financial System Code

(c) Indian Financial Service code

(d) None of the above

14) Which of the following statements are True?

(a) As per Section 42 of RBI Act Scheduled Banks should maintain cash reserve by keeping current account balance with RBI

(b) Sec.42 of RBI Act requires, CRR to be maintained by Scheduled Banks

(c) Scheduled Commercial Banks are required to maintain atleast 95% of the required CRR on a daily basis.

(d) All the above

15) What is Ultra Small Branch (US

(b) in Financial Inclusion?

(a) It is an one man bank branch managed by an individual BC

(b) It is an intermediate brick and mortar structure between the base branch and BC locations

(c) It is a small bank branch with micro ATM or mobile van for financial inclusion

(d) It is an one man bank branch bank branch managed by an individual BF

16) What kind of complaint can be lodged with the banking ombudsman?

(a) Delay in collection of cheques

(b) Deficiency in cash transaction

(c) Non-issued of demand drafts

(d) All the above

17) Which is not an example of electronic funds transfer:

(a) RTGS

(b) EFT

(c) MICR

(d) ECS

(e) None of these

18)  Which of the following is not one of the terms and conditions for micro credit?

(a) Banks have been given freedom to formulate their own lending norms keeping in view ground realities

(b) Banks have been asked to devise appropriate loan and savings products and the related terms and conditions including size of the loan, unit cost, unit size, maturity period, grace period, margins, etc.

(c) Micro credit covers not only consumption and production loans for various farm and not-farm activities of the poor but also include their other credit needs such as housing and shelter improvements

(d) Primary and collateral security should be obtained from borrowers/guarantors for the loan amount by the bank and NGO  

19)  Fiscal deficit is?

(a) Total income less Govt. borrowing

(b) Total payments less total receipts

(c) Total payments less capital receipts

(d) Total expenditure less total receipts excluding borrowing

(e) None of these

20)  Deposits which can be withdrawn by a customer without notice is called ________

(a) Time Deposits

(b) Demand Deposits

(c) Variable Deposits

(d) Low cost Deposits

(e) None of these

21) A Certificate of Deposit in India can be issued by: All scheduled commercial banks excluding

(a) Regional Rural Banks     

(b) Commercial banks

(c) Non-scheduled banks

(d) Central banks

(e) None of these

22)  In correspondent banking, a local bank

(a) functions as agent

(b) charges fee for the services rendered

(c) the principal bank is able to conduct business in other countries.

Which of the following options is correct?

(a) a, b only

(b) b, c only

(c) a, b, c

(d) a, c only

(e) None of these

23) When the foreign exchange deals take place through telephone or other electronic system it is called:

(a) Over the counter   

(b) Over the electronic media

(c) Over all channels

(d) Over all exchanges

(e) Over the media

24) Which of the following organizations issues “RuPay card”?

 (a) National Payments Corporation Of India

(b) Reserve Bank of India

(c) Indian Banks Association

(d) Securities Exchange Board of India

(e) Insurance Regulatory and Development Authority

25) In CBS ‘C’ stands for CORE. What is ‘CORE’?

(a) Centralized Online Real-time Environment

(b) Collateralized online Real-time exchange

(c) Centralized online Real-time exchange

(d) Collateralized offline real-time environment

(e) None of the above

26) Payment of a crossed cheque can be made

(a) only in cash

(b) through clearing account of a bank

(c) both in cash and through clearing account of a bank

(d) Payment can’t be done

(e) Banks normally return the cheque

27)  “Hot money” means?

(a) Money earned through illegal transactions

(b) Money earned through speculative transactions

(c) Money used to hoard scarce commodities

(d) Capital which is frequently transferred between financial institutions in an attempt to maximize interest or capital gain

(e) None of these

28) The Reserve Bank of India publishes the classification of demand deposits with the commercial banks. Which of the following are included in demand deposits?

(a) Fixed deposits held as security for advances is a classification of time deposits

(b) Deposits held as security for advances which are repayable on demand

(c) Current deposits

(d) Demand liabilities portion of saving bank deposits

(e) b, c and d

29)  Finance Minister Arun Jaitley had announced for the consolidation of public sector banks in the budget speech this year. Which committee is been working as a guiding principle in this regard?

(a) Deepak Mohanty Committee

(b) Vyas Committee

(c) Subrahmanyam Committee

(d) Narasimham Committee

(e) MB Shah committee

30)  A demand draft is issued by one bank branch on another branch is legally

(a) cheque

(b) Promissory note

(c) Delivery order

(d) Supply bill

(e) Cash bill

31) The formal institutional credit delivery system in rural India comprises of which of the following?

I. Co-operative Banks

II. Commercial Banks

III. Regional Rural Banks

IV. Self Help Groups

(a) Only I and II

(b) Only III and IV

(c) Only I, II and IV       

(d) All of the above

(e) Only I

32)  Time deposits include:

(a) Fixed deposits

(b) Cash certificates, recurring deposits

(c) Time liabilities portion of saving bank deposits

(d) Staff security deposits

(e) All of the above

33) Which of the following statement(s) is/are true about promissory note?

(a) It is always in writing

(b) It has an unconditional undertaking called promise

(c) The promise is to pay money

(d) The money is to be paid money on demand or after some time

(e) All of the above

34) On which of the following types of cheques alterations are not allowed by RBI?

(a) Paper cheque

(b) CTS cheque

(c) Electronic cheque

(d) Cheque with account payee crossing

(e) None of these

35)  Which of the following cannot be endorsed?

(a) A fixed deposit receipt

(b) A bank draft

(c) A Promissory note

(d) A usance bill of exchange

(e) None of these

36) The process of the total valuation of the financial capital assets of a company is technically known as?

(a) Market Capitalization    

(b) Gross Domestic Product

(c) Net wealth of the country

(d) Gross Domestic Resources

(e) None of these

37) The term “dormant accounts” means?

(a) Accounts showing an average balance of less than Rs. 100 during a half year

(b) Accounts which remains inoperative for an extended period of time

(c) Accounts which have been blocked under the exchange control regulations

(d) Loan/cash credit/overdraft accounts which are considered irrecoverable

(e) None of these

38) Which of the following is/are different categories of inflation?

I. Wage Push

II. Cost push

III. Demand pull

(a) Only I

(b) Both I and II

(c) Both II and III

(d) All of the above

(e) Only II

39)  A signed undertaking from one party containing a promise to pay a stated sum to a specified person or a company is known as ____

(a) Power of Attorney

(b) Promissory Note

(c) Purchasing Power Parity

(d) None of the Above

(e) Both A and B

40) What is a stale cheque?

(a) A cheque issued without drawers signature

(b) A cheque with only signature of the drawer

(c) A cheque which has completed six months from its date of issue

(d) A cheque which is more than 3 months old from the date of issue

(e) A cheque which is more than six months old from the date of issue

41) If neither the word “Bearer” nor “order” is written on a cheque, payment will be made by treating it as:

(a) A bearer cheque

(b) An order cheque

(c) At banks discretion

(d) Cannot be paid at all

(e) None of the above

42) Crossing on a cheque can be cancelled by the ………… of the cheque, under his full signature

(a) Payee

(b) Drawee

(c) Endorser

(d) Holder

(e) Drawer

43) Which one of the following is “material alteration” of a negotiable instrument?

(a) Converting an order cheque to bearer cheque

(b) Putting a signature on the back of the cheque

(c) Crossing of an uncrossed cheque

(d) Writing an amount on a blank cheque

(e) None of the above

44) Financial Inclusion means provision of:

(a) Financial services namely, payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the same

(b) Ration at affordable cost to persons

(c) House at affordable cost to persons

(d) Education at affordable cost to persons

(e) None of the above

45) A cheque which is payable to any person who presents the cheque for payment at the bank counter is called

(a) Bearer cheque

(b) Order cheque

(c) Open cheque

(d) Blank cheque

(e) All of these

46) Which secure system was introduced by the RBI in 2005 for facilitating one-to-one funds transfer requirements of individuals /corporates?

(a) ECS

(b) NEFT

(c) RTGS

(d) Cheque Truncation

(e) Oversight of Payment and Settlement  systems

47) Which of the following organizations issues “RuPay card”?

(a) National Payments Corporation Of India

(b) Reserve Bank of India

(c) Indian Banks Association

(d) Securities Exchange Board of India

(e) Insurance Regulatory and Development Authority

48)  The price or ratio or value at which one currency is exchanged for another currency is called______

(a) Contract of foreign currency

(b) Price of foreign currency

(c) Exchange rate

(d) Any of the above

(e) None of the above

49) NEFT is an electronic fund transfer system that operates on a _________ basis which settles transactions in batches.

(a) Domain Net Settlement (DNS)

(b) Defined Net Settlement (DNS)

(c) Declared Net Settlement (DNS)

(d) Deferred Net Settlement (DNS)

(e) None of the above

50) What is the maturity period of “certificate of deposit” for commercial banks?

(a) Min 7 days-Max 12 months

(b) Min 7 days-Max 14 days

(c) Min 1 year-Max 3 year

(d) Min 1 year-Max 2 year

(e) Min 1 day-Max 7 days